Ethiopia will soon start importing cheaper refined oil from South Sudan to substitute the more expensive product from the Middle East, an official announced on Wednesday.
Koang Tutlam, Ethiopia's state minister for mines and petroleum, said the move will see Addis Ababa save 15 percent to 20 percent on the 3.4 billion U.S. dollars it uses to import close to 4 million tons of refined products every year for its population of more than 100 million inhabitants.
"We import almost all of our oil and other refined products from the Middle East, but owing to the close proximity of about 200 km between the oilfields of Pagak and Adar and the Ethiopian border, we stand to save so much in expenditure," Tutlam told journalists in Juba during a two-day energy conference.
The meeting was organized by South Sudan's petroleum ministry in partnership with African Oil and Power, an organization that brings together ministers and senior-level government officials and top executives of private sector companies spanning the energy value chain to explore ways of utilizing oil resources to achieve economic stability.
Tutlam said his country currently exports hydroelectric power to South Sudan and will soon start to export about 400MW to Kenya in a bid to expand its market.
South Sudan has the third-largest oil reserves in sub-Saharan Africa estimated at 3.5 billion barrels and much more still remains unexplored.
He noted that if the revitalized peace process that is anchored on championing stability and economic recovery comes to fruition, Ethiopia will become a big market for South Sudan's oil.
"I think all will be well after two to three years after which the two countries can put up the infrastructure which will benefit both nations," he said.
Editor:Cherie
